The conventional wisdom, of historian and layman alike, pictures
Herbert Hoover as the last stubborn guardian of laissez-faire in
America. The laissez-faire economy, so this wisdom runs, produced
the Great Depression in 1929, and Hoover's traditional, do-nothing
policies could not stem the tide. Hence, Hoover and his hidebound
policies were swept away, and Franklin Roosevelt entered to bring to
America a New Deal, a new progressive economy of state regulation
and intervention fit for the modern age.

The major theme of this paper is that this conventional historical view
is pure mythology and that the facts are virtually the reverse: that
Herbert Hoover, far from being an advocate of laissez-faire, was in
every way the precursor of Roosevelt and the New Deal, that, in short,
he was one of the major leaders of the twentieth-century shift from
relatively laissez-faire capitalism to the modern corporate state. In
the terminology of William A. Williams and the New Left, Hoover was a
preeminent "corporate liberal."

When Herbert Hoover
returned to the United States in late 1919, fresh from his post as
Relief Administrator in Europe, he came armed with a suggested
"Reconstruction Program" for America. The program sketched the outlines
of a corporate state; there was to be national planning through "voluntary"
cooperation among businesses and groups under "central direction."(1)
The Federal Reserve System was to allocate capital to essential
industries and thereby eliminate the industrial "waste" of free markets.
Hoover's plan also included the creation of public dams, the improvement
of waterways, a federal home-loan banking system, the promotion of
unions and collective bargaining, and governmental regulation of the
stock market to eliminate "vicious speculation."(2)
It is no wonder that Progressive Republicans as well as such Progressive
Democrats as Louis Brandeis, Herbert Croly, and others on the New
Republic, Edward A. Filene, Colonel Edward M. House, and Franklin D.
Roosevelt, boomed Hoover for the presidency during the 1920 campaign.

Hoover was appointed
Secretary of Commerce by President Harding under pressure by the
Progressive wing of the party, and accepted under the condition that he
would be consulted on all the economic activities of the federal
government. He thereupon set out deliberately to "reconstruct America."(3)

Hoover was only thwarted
from breaking the firm American tradition of laissez-faire during a
depression by the fact that the severe but short-lived depression of
1920-21 was over soon after he took office. He also faced some
reluctance on the part of Harding and the Cabinet. As it was, however,
Hoover organized a federal committee on unemployment, which supplied
unemployment relief through branches and subbranches to every state, and
in numerous cities and local communities. Furthermore, Hoover organized
the various federal, state, and municipal governments to increase public
works, and persuaded the biggest business firms, such as Standard Oil of
New Jersey and United States Steel, to increase their expenditure on
repairs and construction. He also persuaded employers to spread
unemployment by cutting hours for all workers instead of discharging the
marginal workers  an action he was to repeat in the 1929 Depression.(4)

Hoover called for these
interventionist measures with an analogy from the institutions of
wartime planning and collaboration, urging that Americans develop "the
same spirit of spontaneous cooperation in every community for
reconstruction that we had in war."(5)

An important harbinger
for Hoover's later Depression policies was the President's Conference on
Unemployment, a gathering of eminent leaders of industry, banking, and
labor called by President Harding in the fall of 1921 at the instigation
of Hoover. In contrast to Harding's address affirming laissez-faire as
the proper method of dealing with depressions, Hoover's opening address
to the Conference called for active intervention.(6)
Furthermore, the Conference's major recommendation  for coordinated
federal state expansion of public works to remedy depressions  was
prepared by Hoover and his staff in advance of the conference.(7)
Of particular importance was the provision that public works and public
relief were to be supplied only at the usual wage rate  a method
of trying to maintain the high wage rates of the preceding boom during a
depression.

Although these
interventions did not have time to take hold in the 1921 depression, a
precedent for federal intervention in an economic depression had now
been set, as one of Hoover's admiring biographers writes, "rather to the
horror of conservatives."(8)

The President's
Conference established three permanent research committees, headed
overall by Hoover, which continued during the 1920s to publish studies
advocating public-works stabilization during depressions. One such book,
Seasonal Operations in the Construction Industry (Washington,
D.C.: Conference on Unemployment, 1921), the foreword to which was
written by Hoover, urged seasonal stabilization of construction. This
study was in part the result of a period of propaganda emitted by the
American Construction Council, a trade association for the construction
industry, which of course was enthusiastic about large-scale programs of
government contracts for the construction industry. This Council was
founded jointly by Herbert Hoover and Franklin D. Roosevelt in the
summer of 1922, with the aim of stabilizing and cartelizing the industry,
and of planning the entire construction industry through the imposition
of various codes of "ethics" and of "fair practice." The codes were the
particular idea of Herbert Hoover. Following the path of all would-be
cartelists who are hostile to no one more than the individualistic
competitor, Franklin D. Roosevelt, President of the American
Construction Council, took repeated opportunity to denounce rugged
individualism and profit-seeking by individuals.(9)

Throughout the 1920s
Hoover supported numerous bills in Congress for public-works programs
during depressions. He was backed in these endeavors by the American
Federation of Labor [AF of L], the United States Chamber of Commerce,
and the American Engineering Council, of which Hoover was for a time
president. It was clear that the engineering profession would also
benefit greatly from government subsidization of the construction
industry. By the middle twenties, President Coolidge, Secretary Mellon,
and the National Democratic Party had been converted to the scheme, but
Congress was not yet convinced.

After he was elected
President, but before taking office, Hoover allowed his public-works
plan (the "Hoover Plan") to be presented to the Conference of Governors
in late 1928 by Governor Ralph Owen Brewster of Maine. Brewster called
the plan the "Road to Plenty," a name that Hoover had taken from Foster
and Catchings,(10)
the popular co-authors of a plan for massive inflation and public works
as the way to end depressions. Although seven or eight governors were
enthusiastic about the plan, the Governors' Conference tabled the scheme.
A large part of the press hailed the plan extravagantly as a "pact to
outlaw depression." Leading the applause was William Green, head of the
AF of L, who hailed the plan as the most important announcement on wages
and employment in a decade, and John P. Frey of the AF of L who
announced that Hoover had accepted the AF of L theory that depressions
are caused by low wages. The press reported that "labor is jubilant"
because the new President's remedy for unemployment is "identical with
that of labor."

The close connection
between Hoover and the labor leadership was no isolated phenomenon.
Hoover had long agitated for industry to encourage and incorporate labor
unionism within the framework of the emerging industrial order. Moreover,
he played a crucial role in converting the labor leaders themselves to
the idea of a corporate state with unions as junior partners in the
system, a state that would organize and harmonize labor and capital.

Hoover's pro-union views
first achieved prominence when, as chairman of President Wilson's Second
Industrial Conference (1919/20), he guided this conference of corporate-liberal
industrialists and labor leaders to criticize "company unionism" and to
urge the expansion of collective bargaining, government arbitration
boards for labor disputes, and a program of national health and old-age
insurance. Soon afterward Hoover arranged a meeting of leading
industrialists with "advanced views," in an unsuccessful attempt to
persuade them to "establish liaison" with the AF of L. In January, 1921,
the AF of L journal published a significant address by Hoover, which
called for the "definite organization of great national associations" of
economic groups and their mutual cooperation. This cooperation would
serve to promote efficiency, and mitigate labor-management conflict.
Above all, workers would be protected from "the unfair competition of
the sweatshop." Still more did this mean "protection" of the lower-cost
large employers from the competition of their smaller "sweatshop" rivals
 a typical instance of monopolizers using humanitarian rhetoric to gain
public support for the restriction and suppression of competition.
Hoover went so far in this address as to support the closed shop,
provided that the closure was to be for the sake of unity of purpose in
aiding the employer to increase production and to mold a cooperative
labor force. In conclusion, Hoover called for a new economic system,
what was in effect a corporate state, that would provide an alternative
to old-fashioned laissez-faire capitalism on the one hand and Marxian
socialism on the other.(11)

In an authoritative study,
William English Walling, an intimate of Samuel Gompers, wrote of the
crucial influence of Hoover's theories upon Gompers and the AF of L,
especially from 1920 on. This influence was particularly strong in
persuading the labor leaders to endorse the idea of organizing all the
large occupation groups and then effecting their mutual harmony and
cooperation under the aegis and control of the federal government.
Capital and labor in each industry, organized in collaboration, were to
have the role of government of that particular industry.(12)
It was indeed appropriate for the French politician Edouard Herriot to
praise Hoover in 1920 for his idea of fusing the "economic trinity" of
labor, capital, and government into one system, thus putting an end to
the class struggle.(13)

Another reason for
Hoover's pro-union attitude was that he had adopted the increasingly
popular thesis that high wage rates were a major cause of prosperity. It
then followed that wage rates must not be lowered during depressions. In
contrast to all prior depressions, including 1920-21, when wage rates
were cut sharply, wage-cutting was considered by Hoover to be
impermissible and as leading to a failure in purchasing power and the
perpetuation of depression. These views were to prove a fateful
harbinger of the policies used during the Great Depression.

One of Hoover's most
important labor interventions during the 1920s came in the steel
industry. He persuaded Harding to hold a conference of steel
manufacturers in May, 1922, after which he and Harding called upon the
steel magnates to bow to the workers' demand to shift from a twelve-hour
to an eight-hour day. In doing so, Hoover was siding with the liberal
wing of the steel industry, led by Charles R. Hook and Alexander Legge,
whose plants had already instituted the shorter workday, and who of
course were anxious to impose higher costs on their lagging competitors.
When Judge Gary of United States Steel and other leading steelmen
refused to go along, Hoover acted to mobilize public opinion against
them. Thus, he induced the national engineering societies to endorse the
eight-hour day, and himself wrote the introduction to the endorsement.
Finally, Hoover wrote a stern letter of rebuke for President Harding,
which Harding sent to Gary on June 18, 1923, forcing Gary to capitulate.

Herbert Hoover also
played a leading role in collectivizing labor relations in the railroad
industry, thereby cartelizing that industry still further than before
and incorporating railway unions within the cartel framework. After
repeated and largely unsuccessful interventions to try to gain pro-union
concessions during the railroad strike of 1922, Hoover became a major
author  along with union lawyers Donald Richberg and David E.
Lilienthal  of the Railway Labor Act of 1926, by which the railway
unions got themselves established in the industry. The ancestor of the
New Deal's Wagner Act, the Railway Labor Act, imposed collective
bargaining upon the industry; in return, the unions agreed to give up
the strike weapon. The great majority of the railroads warmly supported
this new departure in American labor relations.(14)

"Herbert Hoover's entire program of activities as
Secretary of Commerce was designed to advance the subsidization of
industry and the interpenetration of government and business."

In a
major address before the United States Chamber of Commerce,
on May 7, 1924, Hoover spelled out his corporatist views in
some detail. He called for the self-regulation of industry
by way of trade associations, farm groups, and unions. In a
vein strongly reminiscent of English Guild Socialism, Hoover
harked back to the Middle Ages for his model: the guilds, he
asserted, obtained "more stability through collective
action." The job of the associations was to strengthen "ethical
standards" in industry by eliminating "waste" and
"destructive competition." In short, Hoover was calling for
the national cartelization of industry under the aegis of
government.(15)
Samuel Gompers hailed the address and considered this "new
economic policy" to be the same as the newly forged position
of the AF of L.(16)

Herbert Hoover's entire
program of activities as Secretary of Commerce was designed
to advance the subsidization of industry and the
interpenetration of government and business. As Hoover's
admirer and former head of the United States Chamber of
Commerce put it, Hoover had advanced the "teamplay of
government with the leaders of character in the various
industries."(17)
Thus, Hoover expanded the Bureau of Foreign and Domestic
Commerce fivefold, opening numerous offices at home and
abroad. His trade commissioners and attachιs aided American
exports in numerous ways. He also reorganized the Bureau
along commodity lines, with each commodity division headed
by someone chosen by the particular trade or industry, from
the trade "he knows and represents."(18)
Furthermore, Hoover promoted the cartelization of each
industry by inducing each trade to create a committee to
cooperate with the Department of Commerce, and to select the
industry's choice for head of the commodity division.
Officials in the Department were systematically recruited
from business, to stay in the Department for a few years,
and then to return to private business at higher-paying
jobs.

One favorite method of
Hoover's for subsidizing as well as cartelizing exports was
to foster the creation of export-trade associations. Thus,
in 1926, Hoover repeatedly urged the coffee trade to band
together and create a National Coffee Council, so that all
American coffee buyers could join together to lower buying
prices. Hoover and his aides craftily suggested to the
coffee trade that one union leader and one woman consumer be
named to the proposed Coffee Council as a public-relations
device to relieve public fears of a cartel.(19)

The difficulties of
forming a coffee cartel proved insurmountable; but Hoover
had more luck with the rubber industry, organizing it to
fight British cartel restrictions on Asian rubber production
that had been imposed in 1922. Hoover led the rubber
industry in a drive to induce Americans to buy less rubber
and hence to lower the price, as well as to promote
American-owned sources of supply, by such means as
government subsidies to new United States-owned rubber
plantations in the Philippines.(20)
An American rubber-buying pool was established in 1926, and
lasted until the end of British restrictions two years later.(21)

As soon as he assumed
office, Hoover induced President Harding to pressure
investment bankers to require that the proceeds of their
loans abroad be used to purchase American exports. When
little came of this pressure, Hoover began to threaten
congressional action if the banks did not agree. For Hoover,
the aim of subsidizing exports was so important that even
unsound foreign loans that could serve this purpose were
considered worthwhile.(22)

Hoover's opposition to
foreign "monopoly" did not of course prevent him from
supporting a protective tariff in the United States, thus
providing privilege to American domestic as well as export
firms. During the 1920s, Hoover was also active in promoting
the cartelization of the domestic oil industry. As an active
member of President Coolidge's Federal Oil Conservation
Board since its inception in 1924, Hoover worked in
collaboration with a growing majority of the oil industry in
behalf of restrictions on oil production in the name of
"conservation." This was a "conservation," by the way, that
was urged regardless of whether American oil resources
seemed to be scarce or superabundant. Hoover was
particularly interested in removing antitrust limitations on
industrial cooperation in such restrictive measures.(23)

In the field of coal,
Hoover sponsored repeated attempts at cartelization. The
first attempt was a bill in 1921 to establish a federal coal
commission to gather and publish statistics of the coal
industry, so as to publicize price data and thereby
facilitate industry-wide price-fixing. Failing a commission,
the Department of Commerce was eager to take on the task.
However, this and a later scheme by Hoover to encourage
marketing cooperatives in coal by exemption from antitrust
laws, were defeated by the opposition of competitive low-cost
Southern coal operators. Undaunted, Hoover, in 1922,
prepared a full-fledged cartelizing plan. The idea was to
establish unemployment insurance in the coal industry, so
designed as to penalize in the cost of the plan the
part-time and seasonal coal mines, and thereby to drive
these higher-cost mines out of business. The coal industry
would then form cooperatives, which would fix and allocate
quotas on production, putting more mines out of operation,
the owners to be compensated out of the increased cartel
profits made by the rest of the industry. The district coal
cooperatives were to market all the coal and then divide the
revenues proportionately. But once again Hoover could not
command the needed support from the coal industry and the
public.(24)

Hoover played a similar
role in cartelizing the cotton textile industry. Favoring
the "open-price" plan for stimulating price agreements,
Hoover used his Department of Commerce to provide the price
publicity that might be illegal for a trade association.
Hoover also played a role in forcing the cotton textile
industry to establish a nationwide rather than a regional
trade association, to the delight of the bulk of the
industry. Hoover repeatedly urged the many reluctant firms
to join this Cotton Textile Institute, which gave promise of
stabilizing the industry and eliminating "waste" in
production. Hoover went so far as to endorse, in 1927, the
CTFs plan to urge each of the member firms to cut production
by a certain definite amount.(25)

One of the clearest
indications of how far removed Hoover was from laissez-faire
was his leading role in nationalizing the airwaves of the
fledgling radio industry. Hoover put through the
nationalizing Radio Act in 1927 as a substitute for the
courts' increasing application of the common law, granting
private ownership of the airwaves to the first radio
stations that put them into use.(26)

One of the most pervasive
and least studied methods by which Hoover helped to
monopolize industry during the 1920s was to impose
standardization and "simplification" of materials and
products. In this way, Hoover managed to eliminate the
"least necessary" varieties of a myriad of products, greatly
reducing the number of competitive sizes, for example, of
automobile wheels and tires, and threads for nuts and bolts.
All in all, about three thousand articles were thus "simplified."
The recommendations for simplification were worked out by
the Department of Commerce with the aid of the eager
committees representing each trade.(27)

Hoover's approach to the
farm question was consistent: a repeated emphasis on the
cartelization of agriculture.(28)
At first, the favored means was the subsidizing by
government of farm cooperatives. Hoover helped write the act
of August, 1921, which expanded the funds allotted to the
War Finance Corporation and permitted it to lend directly to
the farm co-ops. He also supported the farm-bloc bill for an
extensive system of Federal Intermediate Credit Banks and a
Federal Farm Loan Board, which were to lend federal funds to
farm co-ops. In the Department of Commerce, he was able to
help farm co-ops with marketing programs, and with aid in
finding export markets.

Hoover soon enlarged his
ideas of farm intervention; he was one of the earliest
proponents of a Federal Farm Board, designed to raise and
support farm prices by creating federal stabilization
corporations that were to purchase farm products and to lend
money to farm co-ops for such purchases. And to this end, in
1924, Hoover helped write the unsuccessful Capper-Williams
Bill. As a presidential candidate in 1928 he promised the
farm bloc that he would promptly institute a farm price-support
program.(29)
It was a promise that he hastened to keep, for as soon as he
became President, Hoover drove through the Agricultural
Marketing Act of 1929. This Act created a Federal Farm Board
with a revolving fund of $500 million to raise and support
farm prices and to aid farm co-ops; the Board was to conduct
its price-raising operations through stabilization
corporations for the various commodities, with the
corporations also serving as marketing agencies for the
coops. Furthermore, Hoover appointed to the Board
representatives of the various agricultural and farm co-op
interests: a cartelization operated by the cartelists
themselves.(30)

Mobilizer and economic
planner of World War I; persistent advocate of cartelization
and government-business partnership in stabilizing industry;
pioneer in promoting a pro-union outlook in industry as a
method of insuring the cooperation of labor; booster of high
wages as a sustainer of purchasing power and business
prosperity; ardent proponent of massive public-works schemes
during depressions; advocate of government programs to boost
farm prices and farm co-ops; no one could have been as
ideally suited as Herbert Clark Hoover to be President at
the onset of a Great Depression and to react with a radical
program of statism to be trumpeted as a "New Deal." And that
is precisely what Herbert Hoover did. It is one of the great
ironies of historiography that the founder of every single
one of the features of Franklin Roosevelt's New Deal was to
become enshrined among historians and the general public as
the last stalwart defender of laissez-faire.

Let us consider the New
Deal  a rapid intensification of government intervention
that began in response to a severe depression, and featured:
cartelization of industry through government-and-business
planning; bolstering of prices and wage rates; expansion of
credit; massive unemployment relief and public-works
programs; support of farm prices; propping up of weak and
unsound business positions. Every one of these features was
founded, and consciously so, by President Hoover. Hoover
consciously and deliberately broke sharply and rapidly with
the whole American tradition of a laissez-faire response to
depression. As Hoover himself proclaimed during his
presidential campaign of 1932:

. . . we
might have done nothing. That would have been utter
ruin. Instead we met the situation with proposals to
private business and to Congress of the most
gigantic program of economic defense and
counterattack ever evolved in the history of the
Republic. We put it into action. . . . No government
in Washington has hitherto considered that it held
so broad a responsibility for leadership in such
times. . . . For the first time in the history of
depressions, dividends, profits and the cost of
living, have been reduced before wages have suffered.
. . . They were maintained until the cost of living
had decreased and the profits had practically
vanished. They are now the highest real wages in the
world.(31)

Hoover began his "gigantic" program as soon as the stock
market crashed on October 24, 1929. His most fateful act was
to call a series of White House Conferences with the
nation's leading financiers and industrialists, and induce
them to pledge that wage rates would not be lowered and that
they would expand their investments. Hoover explained the
general aim of these conferences to be the coordination of
business and government agencies in concerted action.
Industrial group after group pledged that wage rates would
be maintained. Hoover insisted that, contrary to previous
depressions when wage rates fell promptly and rapidly (and,
we might add, the depression was then soon over), wage rates
must now be the last to fall, in order to prop up mass
purchasing power. The entire burden of the recession, then,
must fall upon business profits. The most important of these
conferences occurred on November 21, when such great
industrial leaders as Henry Ford, Julius Rosenwald, Walter
Teagle, Owen D. Young, Alfred P. Sloan, Jr., and Pierre du
Pont pledged their cooperation to the Hoover program. These
agreements were made public, and Hoover hailed them at a
White House conference on December 5, as an "advance in the
whole conception of the relationship of business to public
welfare . . . a far cry from the arbitrary and dog-eat-dog
attitude of . . . the business world of some thirty or forty
years ago." The A F of L lauded this new development; never
before, it proclaimed, have the industrial leaders "been
called upon to act together . . ."(32)
By the following March the AF of L was reporting that the
big corporations were indeed keeping their agreement to
maintain wage rates.(33)

1. Hoover's earlier career confirms this
appraisal of his views; there is no space here, however, to
analyze his earlier ideas and activities.
2. See Joseph Dorfman, The Economic Mind in American
Civilization (New York: Viking Press, 1959), Vol. IV,
pp. 26-28; Herbert Hoover, Memoirs (New York:
Macmillan, 1952), Vol. II, pp. 27 ff; and Murray N.
Rothbard, America's Great Depression (Princeton: D.
Van Nostrand, 1963), p. 170 and Part III.
3. Hoover to Professor Wesley C. Mitchell, July 29, 1921.
Lucy Sprague Mitchell, Two Lives (New York: Simon and
Schuster, 1953), P-364. 4. Hoover, Memoirs, Vol. II, p. 46; and Joseph H.
McMullen, "The President's Unemployment Conference of 1921
and Its Results" (Master's thesis, Columbia University,
1922), p. 33.
5. On the lasting significance of government economic
planning and "war collectivism" during World War I, see
William E. Leuchtenburg, "The New Deal and the Analogue of
War," in J. Braeman, R. H. Bremner, and E. Walters, eds.,
Change and Continuity in Twentieth-Century America (New
York: Harper and Row, 1967), pp. 81-143.
6. See E. Jay Howenstine, Jr., "Public Works Policy in the
Twenties," Social Research (December, 1946), pp.
479-500.
7. Playing a crucial role on this staff was Otto Tod Mallery,
the nation's leading advocate of public works as a remedy
for depressions. Mallery had inspired the nation's first
such stabilization program, in Pennsylvania in 1917, and had
been a leading official on public works in the Wilson
Administration. He was also a leader in the American
Association for Labor Legislation, an influential group of
eminent citizens, businessmen, and economists devoted to
government intervention in the fields of labor, employment,
and welfare. The AALL, endorsing the Conference, boasted
that the Conference's proposals followed the pattern of its
own recommendations, which had been formulated as far back
as 1915. Apart from Mallery, the Conference employed the
services of nine economists who were also officials of the
AALL. The AALL singled out for particular praise Joseph H.
Defrees, of the U.S. Chamber of Commerce, who appealed to
business organizations to cooperate with the Conference's
program, and to accept "business responsibility" for the
unemployment problem. See Dorfman, op. cit., pp. 7-8;
McMullen, op. cit., p. 16; and John B. Andrews, "The
President's Unemployment Conference  Success or
Failure?" American Labor Legislation Review (December,
1921), pp. 307-310.
8. Eugene Lyons, Our Unknown Ex-President (New York:
Doubleday and Co., 1948), p. 230.
9 See Daniel Fusfeld, The Economic Thought of Franklin D.
Roosevelt and the Origins of the New Deal (New York:
Columbia University Press, 1956), pp. 102 ff.
10. Waddill Catchings was a prominent investment banker who
founded the Pollak Foundation for Economic Research, with
Dr. William T. Foster as director, Foster was Brewster's
technical advisor at the Governor's Conference. Foster and
Catchings had called for a $3 billion public-works program
to iron out the business cycle and stabilize the price level.
William T. Foster and Waddill Catchings, The Road to
Plenty (Boston: Houghton Mifflin & Co., 1928), p. 187.
Brewster's presentation can be found in Ralph Owen Brewster,
"Footprints on the Road to Plenty  A Three Billion Dollar
Fund to Stabilize Business," Commercial and Financial
Chronicle (November 28, 1928), p. 2,527. Foster and
Catchings reciprocated by praising the "Hoover Plan" a few
months later. The Plan, they exulted, would iron out prices
and the business cycle; "it is business guided by
measurement instead of hunches. It is economics for an age
of science  economics worthy of the new President." William
T. Foster and Waddill Catchings, "Mr. Hoover's Plan: What It
Is and What It Is Not  the New Attack on Poverty,"
Review of Reviews (April, 1929), pp. 77-78.
11. Herbert Hoover, "A Plea for Cooperation," The
American Federationist (January, 1921). Also see the
important work by Ronald Radosh, "The Development of the
Corporate Ideology of American Labor Leaders, 1914-1933"'
(Doctoral dissertation in history, University of Wisconsin,
1967), pp. 82 ff.
12 William English Walling, American Labor and American
Democracy (New York: Harper & Bros., 1926), Vol. II:
Labor and Government, cited in Radosh, op. cit., pp.
85 ff. Addressing the International Association of Technical
Engineers, Architects and Draftsmen in May, 1921, Gompers
spoke enthusiastically of the close "entente" that had
developed between engineering groups and the AF of L. It was
Gompers, furthermore, who persuaded Hoover to accept the
presidency of the American Engineering Council.
13 Radosh, op. cit., p. 88n.
14 For a pro-union account of the affair by a leading
participant, see Donald R. Richberg, Labor Union Monopoly
(Chicago: Henry Regnery, 1957), pp. 3-28.
15. In his book American Individualism, Hoover had
hailed the growing "cooperation" and "associational
activities" of American industry and the consequent
reduction of "great wastes of over-reckless competition."
Hoover, American Individualism (New York: Doubleday,
1922).
16. Samuel Gompers, "The Road to Industrial Democracy,"
American Federationist (June, 1921). Also see Ronald
Radosh, "The Corporate Ideology of American Labor Leaders
from Gompers to Hillman," Studies on the Left (November
 December, 1966), p. 70. After Gompers' death in 1924, his
successor, William Green, continued the close AF of L
collaboration with Hoover. See Radosh, The Development of
Corporate Ideology, pp. 201 ff.
17. Julius H. Barnes, "Herbert Hoover's Priceless Work in
Washington," Industrial Management (April, 1926), pp.
196-197. Also see Joseph Brandes, Herbert Hoover and
Economic Diplomacy (Pittsburgh: University of Pittsburgh
Press, 1962), p. 3.
18. Brandes, op. cit., p. 5.
19. Ibid., pp. 17-18, 132-139.
20. On Hoover's repeated urging of American oil companies to
join in the development of petroleum in Mesopotamia, see
Gerald D. Nash, United States Oil Policy, 1890-1964
(Pittsburgh: Pittsburgh University Press, 1968), pp. 56-57.
21. Harvey Firestone was the most enthusiastic rubber user
backing the Hoover program, and also in organizing
Americanowned rubber plantations in Liberia. The mighty U.S.
Rubber Co., on the other hand, already owned large rubber
plantations in the Dutch East Indies, which were not subject
to British restrictions. U.S. Rubber was therefore the
rubber user least enthusiastic about the buying pool.
Brandes, op. cit., pp. 84-128. On Firestone's
acquisition of Liberian land, see Frank Chalk, "The Anatomy
of an Investment: Firestone's 1927 Loan to Liberia,"
Canadian Journal of African Studies (March, 1967), pp.
12-32.
22. See Jacob Viner, "Political Aspects of International
Finance, Part II," Journal of Business (July, 1928),
p. 339; Hoover, Memoirs, Vol. II, p. 90. Also see Brandes,
op. cit., pp. 170-191. Hoover also clashed with banks
that made foreign loans to Germany, since he was worried
about the loans building up competitors to American firms,
especially chemical manufacturers. Ibid., pp.
192-195.
23. Nash, op. cit., pp. 81-97.
24. See Ellis W. Hawley, "Secretary Hoover and the
Bituminous Coal Problem, 1921-1928," Business History
Review (Autumn, 1968), pp. 247-270. Also see Hoover,
Memoirs, Vol. II, p. 70. During the coal strike in the
spring of 1922, Hoover organized an emergency system of
rationing and price controls. Harking back to his wartime
experience, he established a network of district committees
to hold down coal prices. After the typically Hooverian "voluntary"
controls failed to work, Hoover called for governmental
price-fixing, and by late September, Congress had passed a
law appointing a Federal Fuel Distributor to enforce "fair
prices."
25. Louis Galambos, Competition and Cooperation
(Baltimore: Johns Hopkins Press, 1966), pp. 78-83, 102-103,
108, 114-115, 123, 128-129. The cotton textile industry
urged Secretary Hoover to become the first president of
their new Institute; as it was, the president was a man
recommended by Hoover.
26. See in particular Ronald H. Coase, "The Federal
Communications Commission," Journal of Law and Economics
(October, 1959), pp. 30ff. Also see Hoover, Memoirs,
Vol. II, pp. 139-142.
27. Hoover, Memoirs, Vol. II, pp. 66-68.
28. In the case of salmon fishing, Hoover called for federal
regulations from 1922 on. In that year he induced Harding to
create salmon reservations in Alaska, thus cutting salmon
production and raising prices. See Donald C. Swain,
Federal Conservation Policy, 1921-1933 (Berkeley:
University of California Press, 1963), PP. 25 ff.
29. It was not only the farm bloc that wanted a nationally
cartelized agriculture. Two of the fathers of the agitation
for farm price support were George N. Peek and General Hugh
S. Johnson, heads of the Moline Plow Company, one of the
largest farm-equipment manufacturers. As such they were
directly interested in the subsidizing of farmers. Big
business in general was also enthusiastic, the farm price-support
plan being warmly supported by the Business Men's Commission
on Agriculture, established jointly by the U.S. Chamber of
Commerce and the National Industrial Conference Board. See
Dorfman, op. cit., Vol. IV, pp. 79-80.
30. Chairman of the eight-man FFB was Alexander Legge,
president of International Harvester Co., one of the major
farmmachinery manufacturers, and like Peek and Johnson, a
protege of financier Bernard M. Baruch since the days of the
economic planning of World War I. Others represented on the
Board were the tobacco co-ops, the livestock co-ops, the
Midwest grain interests, and the fruit growers. See Theodore
Saloutos and John D. Hicks, Agricultural Discontent in
the Middle West (Madison, Wis.: University of Wisconsin
Press, 1951), pp.407-412.
31. Rothbard, America's Great Depression, pp.
169-186. One of the first observers who saw that the radical
break with the past came with Hoover and not with F. D.R.
was Walter Lippmann, who wrote in 1935 that the "policy
initiated by President Hoover in the autumn of 1929 was
something utterly unprecedented in American history. The
national government undertook to make the whole economic
order operate prosperously. . . . The state attempted to
direct by the public wisdom a recovery in the business cycle
which had hitherto been left with as little interference as
possible to individual exertion." Walter Lippmann, "The
Permanent New Deal," reprinted in R.M. Abrams and L.W.
Levine, eds., The Shaping of Twentieth-Century America
(Boston: Little, Brown & Co., 1965), p. 430. Similarly, the
perceptive term "Hoover New Deal" was coined by the
contemporary observer and economist Benjamin M. Anderson.
See "The Road Back to Full Employment," in P. Homan and F.
Machlup, eds., Financing American Prosperity (New
York: Twentieth Century Fund, 1945), pp. 9-70; and Anderson,
Economics and the Public Welfare: Financial and Economic
History of the U.S., 1914-46 (Princeton: D. Van
Nostrand, 1949).
32. The American Federationist (January, 1930). On
the White House Conferences, see Robert P. Lamont, "The
White House Conferences," The Journal of Business (July,
1930), p. 269.
33. The American Federationist (March, 1930), p. 344.